Cardano (ADA)
Basics * Layered currency and contracts * Smart contract platform created "by scientists". EOS/Ethereum competitor. * Created by IOHK (Input Output Hong Kong) “Founded in 2015 by Charles Hoskinson and Jeremy Wood, IOHK is a decentralized technology company committed to using peer-to-peer innovations to provide financial services to the three billion people who don’t have them. We are an engineering company that builds cryptocurrencies and blockchains for academic institutions, government entities and corporations.”. In October, 2017, Hoskinson stated that IOHK had nearly 100 employees and contractors, three research engineers, and operate in nearly ten countries. * The team has published a set of other papers, one for a scalable and decentralized randomness algorithm, one for an efficient and decentralized poker protocol, and one for secure sidechains. Besides the randomness algorithm, which is used in Ouroboros to select stake winners, Cardano has not incorporated the ideas of the other papers, yet. * "The name “Cardano” comes from an Italian physician and mathematician born in the year 1501 called Girolamo Cardano, who invented, amongst other things, the combination lock, the solution of the cubic equation, the solution of the quartic equation and also the first systematic computation of probabilities." ICO and Coin Details * Cardano’s ICO took place in 4 stages between September 2015 - January 2017 with heavy Know Your Customer (KYC) requirements. It was marketed as an “investment to retire on” to primarily Japanese investors; in fact, 95% of the buyers were of Japanese origin, primarily in the 35-55 age bracket. 2.56% of buyers were Korean, and 2.39% were Chinese. The ICO oversaw a total sale of approximately 26,000,000,000 of the 45,000,000,000 maximum supply of ADA tokens. At the conclusion of the ICO a total of approximately $63 million USD was raised; this puts the price at an average of $0.00242 per ADA, and the market capitalization immediately after the ICO at approximately $109 million USD. * While around 26,000,000,000 ADA was sold in the ICO, an additional 5,185,414,108 ADA were distributed to IOHK, Emurgo, and the Cardano Foundation. * A total of 31,112,484,646 ADA was made available at Cardano’s launch. * From this post (27-1-2019): "IOHK has publicly shared its ADA address and that one third of the 2,463,071,701 ADA they received (of which ~97.5% is still there) is available immediately, one third is made available on June 1st, 2018 and the final third on June 1st, 2019. While the Cardano Foundation and Emurgo haven’t publicly shared their ADA address, it is believed that Emurgo originally held 2,074,165,643 ADA in this address and the Cardano Foundation originally held 648,176,763 ADA in this address, as the sum of these amounts adds up exactly to the original total. Finally, the remaining 13,887,515,354 ADA of the 45 billion ADA that will ever exist (maximum supply) will be minted as block rewards." "On 21–1–2019, Binance is the largest ADA holder, despite only one of its addresses being listed here. The ADA addresses of IOHK and the Cardano Foundation are also labelled and visible in the top-5. Based on the number of transactions, it is likely the #4 and #7 listed addresses are also exchanges. On this day, these top-10 ADA holders hold 30% of Cardano’s current supply. If we zoom out using the next two chart-pies, we see that on 21–1–2019, the top 1.34% of all ADA addresses (although keep in mind that this total includes a large number of ‘dust’ addresses as well) hold 22,434,630,873 ADA, which is 72.1% of the current supply." * Cardano's UTxO distribution can be viewed here. And the Rich List can be viewed here. * The smallest unit of ADA (1/1,000,000 ADA) is called a Lovelace. This is in tribute to the first recognized computer programmer, Ada Lovelace. Tech * Cardano’s average transaction throughput is 10-15 transactions per second. This is comparable to Ethereum. Charles Hoskinson has claimed that Ouroboros (click for more info) can perform at more than 200 transactions per second in a lab unsharded. Also claims it is much more secure then Ethereum's Casper * Built in the Haskell programming language (according to someone in their Telegram chat (14-1-2020), Haskell testnet 'almost live'), which works well for mission-critical code. They are now also working on a Rust project. Update: their Rust was launched 2-10-2018. * Uses the Deadalus and Icarus wallet. * "Just like Ethereum has different clients based on Go, Rust, Java, Scala, the same way Cardano has Rust and Haskell based clients. Daedalus uses Haskell node in its back-end, Yoroi uses Rust node in its back-end, because Rust client has Icarus library for light wallets. * POS called Ouroboros. "Research continues (9-2019) following the initial paper and Byron era implementation, with new variants of the protocol developed and published gradually." * From this Store of Value blog: "Ouroboros is a provably secure proof of stake algorithm developed by a team of IOHK scientists led by Prof. Aggelos Kiayias. The algorithm is backed by a peer reviewed paper. According to Charles Hoskinson, the founder of Cardano, Ouroboros’s paper was rewritten 8 times." '' ''The name Ouroboros comes from the name of an ancient symbol depicting a serpent or dragon eating its own tail. The symbol originated in ancient Egyptian iconography. The name is fitting for this algorithm, since Ouroboros operates in epochs. Each Ouroboros epoch contains a fixed number of slots. Each slot represents a new block. The slot leader is an account staking ADA that is responsible for creating the block. Epochs last for 5 days. Slot leaders for an epoch are chosen during the previous epoch. An account’s chance of being chosen is directly tied to the amount of ADA it’s staking. An account can only participate in staking if it has at least 1% of the total supply of ADA. For the accounts that don’t meet that criteria, staking pools will exist so everyone is compensated for owning ADA. This high minimum staking requirement gives rise to concerns of centralization. An account can only participate in staking if it has at least 1% of the total supply of ADA. At the current market cap of $13 billion, one needs to have $130 million worth of ADA to participate in staking. If you assume Cardano will be successful, this number will be significantly higher. Who will be able to afford $130 million worth of ADA? Sure there will be staking pools but even staking pools encourage the centralization of wealth. Those participating in the pools will most likely have to pay fees to the pool owner. This minimum balance requirement also means that at most 100 accounts can participate in staking and because of the power law, it will be much less than 100 accounts that will be staking. There will most certainly be a few entities with exponentially large balances of ADA and the minimum balance requirement will only serve to consolidate their power and control. Ouroboros will initially provide both newly minted ADA and transaction fees as block rewards. When the total supply of ADA reaches 45,000,000,000 block rewards will consist only of transaction fees. According to IOHK/Cardano Foundation, Ouroboros is the first provably secure proof of stake algorithm. The team behind Cardano has mathematically proven that the algorithm is safe from all the known proof of stake attack methods including grinding attacks, nothing-at-stake attacks, and long range attacks. This safety and security should be a very powerful enterprise selling point for Cardano. Ouroboros Praos is an initiative to upgrade Ouroboros. Praos is semi-synchronous, doesn’t require a heavy MPC protocol for randomness and encourages the adoption of a quantum resistant signature scheme for input endorsers and slot leaders. Praos allows for shorter block times. Ouroboros Hydra is another upgrade to Ouroboros that introduces sharding. Sharding allows multiple Ouroboros epochs to run at the same time which significantly increases Cardano’s throughput. One of the hardest things to figure out for sharding is inter-shard communication. * From this reddit thread: "Enterprise accounts (exchanges) will have special wallets that do not allow staking, thus also removing the ability to vote." * From the website of Cardano: [https://testnet.iohkdev.io/plutus/ Plutus]'' is a purpose-built development and execution platform using the functional programming language Haskell. Designed to enable the creation of smart contracts on Cardano, Plutus brings the inherent benefits of functional programming – such as reduced ambiguity and easier testing – to smart contracts. During the Goguen era, Plutus will set the stage for smart contracts that are capable of modeling enterprise-level business and finance scenarios. Not only that, but Plutus and Haskell enable the use of the same codebase both on and off-chain, whereas other smart contract implementations often require developers to use two or more different languages, reducing efficiency and increasing the likelihood of costly mistakes.'' Current Testnet Rewards From this article (18-1-2020): "The rewards generation is directly dependent on the percentage of network participation. In case of 50% participation = Annual return for delegation = 7-8% In case of < 50% participation = Annual return for delegation = 13-15% For more accurate answers please refer to the rewards calculator on Incentivized Testnet website. In case of 50% participation = Return Rate for stake pool operators = 10% (In case 10,000,00 ADA is pledged) Return Rate for stake pool delegators = 12-13% According to reports, ADA worth 3.8 million will be distributed as a reward per era." Roadmap * Charles Hoskinson announced (12-1-2020) that he was 'very optimistic' about Shelly, Goguen and Voltaire to 'be ready within 2020', and parts of Basho as well. In the same video he also said he made the team have 'Identity' as a main priority, to create 'first class citizens'. Also mentioned wanting to create a DEX and stablecoin. * The roadmap been upgraded to Mainnet 1.5 with Ouroboros (click for more info) running. With the release of Cardano 1.5 and OBFT, "the process of preparing the network for gradual decentralization can begin." 2020 Outlook * From this article (18-1-2020): "In early 2018, Hoskinson claimed that by 2019 project Cardano would be: # Fully Decentralized; # Will have smart contracts; # Lots of liquidity; # Multisig paper wallets; # And Hardware Wallet support. Its 2020 and the project is yet to fulfil all these promises. Nonetheless, it managed to achieve a couple of milestones. Unarguably, the launch of its incentivized testnet was a tremendous success. Within 24 hours of the testnet going live, 5 billion ADA coins stood staked. And at press time it has already launched over 500 stake pools. According to the roadmaps and Charles latest tweet, the 2020 focus for the team is: # Smart contracts; # Scalability; # Decentralization; # High assurance; # and Governance." Old roadmap * Cardano used to (2018) lay out three eras in its timeline: the Testnet Era, Bootstrap Era, and Reward Era. The Testnet Era is pretty self-explanatory, Cardano is deployed on a test net. However it has now (9-2019) pivoted to a roadmap of five phases. * In the old roadmap Bootstrap Era is when Cardano SL is deployed on the mainnet BUT it is centralized in order to maintain security. Only a fixed, predefined set of users have control over the system. The assumption is that security is poor in this era since people are slow to redeem their ADA coins. For the first few months, stakeholders who jointly possess the majority of the ADA stake are mostly not online yet. The blockchain can be easily attacked if only a small amount of ADA is staked. As consolation to the community, Ouroboros will not provide any block rewards. * The Reward Era is when the network is in a completely decentralized and trustless mode. According to Cardano’s website, “the system will receive regular software updates moving forward, and a massive amount of new features will be released” in this era. These features would include upgrades to Ouroboros, Cardano’s consensus algorithm, an implementation of Cardano’s control layer, and sidechains. New roadmap * As of 9-2019 Cardano has a roadmap has been organized into five eras: Byron (2017 untill Q1 of 2019), Shelley (2017-2019), Goguen (2017 until Q1 of 2020), Basho (2019 until Q3 of 2020), and Voltaire (from Q2 of 2018 untill Q4 of 2020). Each era is centered around a set of functionalities that will be delivered across multiple code releases. Main components of these five era's are: * Bryon: Testnet, the Ouroboros proof-of-stake consensus protocol, ADA cryptocurrency, block explorer, wallets. * Shelley: Stake Pools, Ouroboros Praos (an upgrade), Ouroboros Genesis, Ouroboros-BFT (which they claim is a milestone ahead), hierarchical deterministic (HD) wallets, multi-sig, * Goguen: Plutus, Plutus Core Cardano’s smart contract virtual machine, a multi-currency ledger (ERC20 like), the IELE virtual machine (which as of 9-2019 has been paused) and the KEVM Virtual Machine (which as of 9-2019 has been paused). * Basho: "Scaling" through sidechains as a sharding mechanism. "Sidechains can be used as a sharding mechanism by off-loading work from the main chain onto a sidechain to increase the capacity of the network." ''Which actually sounds like no actual sharding is happening. * Voltaire: introduction of a voting and treasury system; ''"To fund the future development of the network, Voltaire will also see the addition of a treasury system, whereby a fraction of all transaction fees will be pooled to provide funds for development activities undertaken following the voting process." Usage On-Chain Analysis * From Into The Block (26-11-2019): "Large Transactions have been steady this year The large transactions (greater than $100k) are always a solid indicator of the health of a crypto asset. The ITB’s large transaction analysis for Cardano shows a relatively “steady” pattern YTD, except for a peak during April, following a bull run in March in which the price reached $0.09. The Cardano network is growing slowly but it’s active ITB’s Addresses Metrics indicator shows that 49% of the addresses in the Cardano network are active. Also, during this year, the ratio of new addresses entering the network vs the addresses leaving the network has been slightly positive, but with the launch of Shelley can increase that ratio even more. Large investors in Cardano are “Hodling” IITB’s Ownership indicators provide a view of a crypto asset’s “capital stack” according to the concentration of the asset. Looking inside Cardano, we can see that there are 42 addresses that hold roughly 40% of the circulating supply. The interesting thing is, that only 3 of these addresses are actively trading, which means that the other addresses have less than 300 transactions since their creation and plans to hold the token for the long term. Cardano is more popular in “the West” At first glance, you may think that Cardano has a global predominance, but ITB’s East vs West analysis shows that the token is slightly more popular in the West." Competition * EOS/Ethereum competitor. There is a long history between Dan Larimer (EOS) and Charles Hoskinson (Cardano). In fact, before Ethereum, Hoskinson actually worked with Larimer on Bitshares but also left on bad terms. * Check out this post by Larimer on the flaws of Cardano. Also check out Hoskinson’s rebuttal. * Cardano is built as a layered blockchain. The Cardano Settlement Layer (SL) is where account balances and transactions are managed. It uses the UTXO model and is supposed to be the most secure part of the blockchain. The SL is kept apart from the computational layer where smart contracts are executed. This layered architecture gives the system the flexibility to be more easily maintained and allow for upgrades by way of soft forks. In Ethereum, the settlement layer and the computational layer are intertwined. Team, partnerships, etc. Team "There are three organisations that are contributing to the development of Cardano. The first is the Cardano Foundation, an independent standards body based in Switzerland with core responsibilities to support the community of Cardano users and to work with authorities on regulatory and commercial matters. The second entity working on Cardano is IOHK, a leading cryptocurrency research and development company, which holds the contract to develop the platform until 2020. The final business partner is Emurgo, which invests in start-ups and assists commercial ventures to build on the Cardano blockchain." * Charles Hoskinson; founder Partners * Decided to partner up with Ripple and NEM creating Blockchain in Europe * BP has said it will use/built upon Cardano among other chains. * From this article (18-1-2020): "Last year Cardano entered into a strategic partnership with Sportswear giant New Balance. And it also signed an MOU with Ethiopia to build a cryptocurrency for the nation." Category:Coins/Tokens